Election Predictions: Goldman Sachs Spills the Tea (and Maybe a Little Coffee)

Alright, folks, brace yourselves: Goldman Sachs just released its election predictions, and it's a lot juicier than you’d expect from a financial giant. Here’s the lowdown on how they think the election might hit the stock market—Trump, Harris, divided government, sweeping victories, the works. So grab your popcorn and let’s dive in.

Trump and a Republican Sweep - A 3% Stock Market Pep Rally?

Goldman’s got a 25% chance pinned on Trump pulling off a Republican sweep. If that happens, they’re calling for a potential 3% lift in the S&P 500—think a mini-Trump rally, reminiscent of 2016. But don’t pop the champagne just yet. Consumer stocks might sit this one out as tariffs could rain on their parade, or, as Kamala Harris calls it, the “consumer tax.” Trump’s spin? It’s a tax on Chinese companies, a “win” for American jobs. Either way, they expect the 10-year Treasury yield could jump 20 basis points, all thanks to “Trump-flation”—a curious cocktail of tax cuts and tariffs that Wall Street says could stoke inflation, even if Trump insists it won’t.

Trump in a Divided Government - A More Tame Rally

In the event of a Trump win with a split Congress (about a 30% chance), Goldman anticipates a more modest 1.5% bump in the S&P. No tax cut hype, so yields would likely stay calm. But there’s still room for some tariff action, as Trump’s got plenty of wiggle room to pursue deregulation. Wall Street thinks a “divided government” would keep Trump’s economic moves relatively in check, with less of a market boost but still some deregulation sprinkled in.

Harris and a Divided Government - The Bears Take the Wheel?

Now we’re at a 40% probability: a Harris win with divided government. According to Goldman, this scenario is actually the “worst” for the S&P 500, with a predicted dip. Expect a weaker dollar and lower yields if the market gets the Democratic tilt it dreads. And here’s where the irony kicks in—Goldman is saying a Democratic sweep is almost off the table. But then again, so was a Trump win in 2016, right? Never say never.

The Elusive Democratic Sweep - The Unicorn Nobody Believes In

The “unthinkable” scenario: a Democratic sweep. While it’s got about as much chance as finding a unicorn, Goldman warns that if it does happen, corporate taxes might spike, oil could take a hit, and Wall Street might break out in hives. If you’re a fan of corporate tax hikes, you might want to root for this one—but for the rest of us, maybe not so much.

Market Winners and Losers: The Trump vs. Harris Scoreboard

Now, if you’re keeping a close eye on your portfolio, here’s the stock breakdown. Under Trump, Bitcoin might climb 7%, but fall 3% under Harris. Oil? Likely up with Trump, down with Harris. For fans of regional banks, Trump’s your guy, while Harris looks better for renewable energy. AI and semiconductor stocks seem to like Harris’ odds, probably due to her pro-chip stance. Real estate? It’s predicted to struggle no matter who’s in charge, with Trump taking the bigger blame.

So, there you have it. Keep your eyes on Pennsylvania, though—Goldman’s saying that could be the election’s tipping point. First polls start closing at 4 pm PT, so get ready to hunker down and ride this wild ride all the way to the closing bell.

Good luck out there.